This course is an introduction to the use of laboratory methods in economics for undergraduates. Much of the course will be a
review of some of the more exciting things economists have discovered about markets, human rationality and
human sociality through experimental inquiry. However, the course will also cover important methodological
tools used in designing, running and making use of experimental data. Throughout the course you will run,
participate in and analyze sample classroom experiments, exposing you to a wide variety of experimental designs.

In addition, much of this class will center around readings posted on this website. These readings are not optional or supplemental but are essential parts of the class. You are expected to read these throughout the course. It is also highly recommended that you skim these readings while finding a topic for your class project.

groups

experimental and analysis assignment

1/3 of grade

There are THREEparts to this assignment. First, in Part 1 you and your group will run an
experiment in class using your fellow classmates as subjects. In Part
2 you and your group will analyze the results and write up a report of at
least 2 pages. Finally, in Part 3you and your group will propose
a new experiment (a new set of treatments) that builds off of the one you ran
in class but answers a new question (or improves on the answer to an old
one). You and your group will then write
up a report of at least 3 pages motivating and describing this experiment.

This assignment will be conducted by a group of students and
I expect all members of the group to participate. If I learn that any member of a group has not
been a full participant in planning, running or analyzing their experiment and
reports, I reserve the right to reduce his or her point total relative to other
members of the group.

part 1

You and the other members of your group will conduct an
economics experiment on your fellow students in class. You will be given a
sheet containing your group number, the date on which your group will run its
experiment, and which experiment(s) are to be run.I reserve the right to adjust specifics of
these assignments as the course proceeds.

The experiments you will run will come from one or more of
the following three sources:

Experiments described in
the back of our textbook “Markets, Games and Strategic Behavior” (look for
the gray pages in the
back).Your assignment packet will
give the relevant chapter(s).In
each case the surrounding ideas and typical results of the experiment is
described in the chapter itself and the instructions and decision sheets
for the experiment are described for the corresponding chapter at the back
of the book (on gray pages).Part
of your assignment will involve photocopying the decision materials and
procuring the other materials (decks of cards, dice) for conducting the
experiment. (None of the experiments will actually involve paying
participants in cash.Procedures
describing randomly selecting a participant to actually be paid actual
money should be ignored.)

In several cases I will
include an additional set of instructions and decision sheet in your
packet, describing an additional experiment.Again the decision sheets I provide must
be copied and distributed when you run the experiment.

Group 6 will run an
experiment using the online software veconlab in the last week of class
and this experiment will be run in the EBEL experimental lab in North
Hall.

Your group will be graded on the following criteria for Part
I:

Understanding of the Experiment(s):Before running the experiment I expect
you to fully understand the experiment and to know all of the details of
how it works.You must be able to
answer questions about the rules of the experiment and you must show that
you know the experiment and procedures inside and out.If you are confused about how the
experiment works you will lose points.

Clarity of instructions:
You should explain the experiment in a clear and organized way to
your fellow students prior to the experiment. It is vital that all participants in the
experiment understand the rules.

Experimental control:
You must not reveal what the experiment is meant to study or in any
way attempt to influence participants in their decisions. Participants must know exactly how
they can earn points but you should otherwise not influence their decisions
either directly or indirectly.

Organization:When you
run the experiment, your group should have a very clear idea of how you
are going to actually implement the experiment and be well prepared for
contingencies.You must have all of
the materials together and ready for deployment and the members of the
group must be coordinated in their tasks.I want to see that you have worked out (and even rehearsed) exactly
how you are going to run the experiment.

Timeliness:Some of the
experiments will be very quick.Others will push the limits of the time available in class.You will be penalized for failing to use
time efficiently and especially failing to run the experiment during the
class.

I expect you to return all of the materials used to run the
experiment within 2 weeks so I can use them for grading purposes (this means in
order to do Part 2 you should plan to transfer information from the decision
sheets to a spreadsheet or photocopy them within two weeks).In every experiment, it is vital that
subjects place their class ID number (assigned in the first week of class) in
the upper right hand corner of decision sheets for grading purposes.

part 2

The second part of your group experiment assignment is to analyze the data you have
collected.The attached handouts also
explain exactly what the analysis of the data must consist ofat a
minimum.Finding and writing about
other interesting patterns you discover in the data will be richly rewarded.Your report will usually be at least 2 pages
and often somewhat longer.The report on
the results should not be filled with fluff but also should not be rushed.

Completeness and Accuracy of Data Analysis:Your packet will include instructions on
what I want you to analyze in the data.I expect all of the instructions to be satisfied.I also expect you to turn in the
original data sheets and spreadsheets containing the raw data input from
the decision sheets.I will
sometimes check these for accuracy and expect to find them perfectly
accurate.

Professionalism of Presentation:I expect numerical results to be
presented in professionally formatted tables.I expect graphs and plots to be clearly
labeled and formatted so that the results are very easy to see.You will be penalized for ambiguity in
the presentation of the results.You also may be penalized for going overboard and developing plots
that look like cartoons!

Accuracy of Written Analysis:Your written description of the results should show that you have
read and digested the reading material and should accurately characterize
what the data actually tells us.They should also include a comparison of how the results compare to
the results from analogous experiments described in our readings.

Originality in Data Analysis:If, looking at the data you find new additional ways to look at the
data or discover interesting patterns I did not ask for, you will get
extra points.I want to encourage
you to try exploring your data a bit to see what you find.

part 3

In Part 3 you and your group will design a new experiment
that builds off of the ones you ran in class. (If you and your group are
inspired I will let you propose an experiment on a different topic
instead.).You will write up a report
that is long enough to actually do your idea justice and long enough to
convince me that you are posing a clear question with your proposed
design!This usually means at least 3
pages but I am not strict on page limits – what matters is that you clearly
communicate and motivate your idea.

In the report you will pose a specific research question
related to economics/game theory/decision theory (or a set of such questions)
and explain why the question is interesting or important.You will then describe in sufficient detail
an original experiment designed to answer this question, complete with proposed
parameters and treatments.You will
sketch a set of hypotheses and explain how testing these hypotheses will answer
your motivating research question(s).If
there is relevant microeconomic theory that makes predictions for your
experimental design, I expect you to explain what these predictions are.You will then explain exactly what you would
do with data from the experiment to test your hypotheses.In some cases this might be simple (i.e.
compare the average of Treatment 1 to the average of treatment 2 with a
t-test); in others it might be more complex (i.e. run a regression comparing
variable X to variable Y).

You should feel free to meet with me to discuss your group’s
idea(s) prior to submitting the report to get my feedback on the idea. I will be grading your report for Part 3 on the following criteria:

Originality: The new experiment must either pose a new question or pose an old question in an interestingly new way. You cannot simply take an experiment from the book or an experiment you found online and repeat it. This must be an original creation of your group’s.

Non-Triviality: The question the experiment asks has to be an actual question we don’t know (or don’t “pretty much” know) the answer to. For instance if your experiment boils down to the question “do people prefer more money to less money”, it is not a real question: all else equal we already know that people prefer more money to less. Less directly, questions that have been pretty much answered by previous experiments are not interestingly new questions.

Motivation: The question the experiment poses should be relevant to understanding how human beings or social/economic/political systems operate. You should make a convincing case for your question being interesting and important.

Unity: The questions, hypotheses and experimental design discussed in your report should all be tightly related. The hypotheses should be such that testing them would really answer your motivating question. The treatments or parameters proposed in your experiment should be designed so that running the experiment would allow you to reject (or provisionally accept) the hypotheses. These three components of the report have to be unified.

Clarity: The report has to be written in clear, grammatical and well-edited English. Your thoughts and arguments should be well organized. If I have trouble following your argument, if important details are ignored or if the report is structured in a confusing way you will lose a lot of points on this assignment. This is a report a reader should be able to understand as they read it without having to skip forward in the report.

Concreteness: The report should not be vague about the hypotheses or (especially) the experimental design. I want to know exactly what happens in the experiment and in each treatment.

Economy: The report’s language should not be flowery or showy and it should not be padded with irrelevant material. Long, protracted discussions that have little to do with the paper will result in lost points. Overly ornate prose will result in lost points. The paper should be straightforward and clear and it should get to the point without trying to be fancy. Avoid filler material to pad the size of report all cost as this will likely result in lost points. Get right to the point and stay there!

The report should begin with an introduction that gets right
to the point and immediately
describes the question the experiment was designed to answer.After summarizing your ideas in the introduction
you should describe your experiment in detail, pose your hypotheses, explain
how testing these hypotheses will answer your question and explain in a precise
way what you would do with the data to test your hypotheses.